Restaurant Revenue Management in Dutch Culinary Restaurants presentation at GHTMM Conference 2014 Okinawa

1. Restaurant Revenue Management in Dutch
Culinary Restaurants
Dr. Sjoerd Gehrels & Wouter van Poppel
Stenden Hotel Management School:
Academy of International Hospitality Research
Master in International Service Management
Leeuwarden, The Netherlands
2014 Global Hospitality, Tourism Marketing &
Management Conference,
4th -6th September 2014
Okinawa, Japan

2. Background of the research (1)
- Professorship & Research Program:
The Study for Hospitality (with a
focus on management of Small &
Medium Sized Companies)
- Important topic for hotel (small)
business: Revenue Management in
Culinary Restaurants
- Master students working with
researcher to produce publishable
research papers

3. Background of the research (2)
Output for Stenden:
• Academy of
International Hospitality
Research
• Research in Hospitality
Management Journal

4. “Selling the right table to the right customer for
the right experience at the right contribution-
margin” Van Poppel, 2013
•Researcher (master student) came from F&B
director position in Okura Hotel Amsterdam which
held two Michelin star culinary restaurants (one
and two star).
•He was fascinated by Restaurant Revenue
Management and wondered why so little was
know about application in the luxury sector.
•Both researchers held very good connections
with the important Dutch luxury restaurants.

5. How is restaurant revenue management (RRM) in
Dutch culinary restaurants (DCR) currently managed?
1 What are the success factors for a Dutch culinary restaurant in terms of quality?
2 What is the current awareness and application of RRM in the Netherlands and
what is the strategy behind it?
3 Which persons are involved in the application of RRM?
4 How are restaurant reservations managed?
5 Which market-segments are identified?
6 What customer relations management system is used? What information is
retrieved from customers?
7 How is the budget-forecasting process organized and which measurements are
applied to measure the performance of a restaurant?
8 How are revenues maximized in terms of: food-management; wine-
management and any other possible additional sales?
9 How is the lay-out of the restaurant developed in terms of: efficiency;
configuration and table-setting?
10 How are sales prices for food & beverage established?
11 How is staff trained in relation to restaurant revenue management?
12 What is considered to be the future for RRM? (Technology)
13 What technology is applied in Dutch culinary restaurants?
14 What are negative aspects in applying restaurant revenue management?

6. Management
Areas & Issues
Cross
1992 -
2009
Kimes
1998-
2012
(18 art)
Thompson
2003-2013
(8 art)
Yeoman
&
Watson
1999
Other Sources:
FORECASTING
Information -
management/tech
nology
Yes 2008c Yes Yes Ansel & Dyer,
1999
(IT-Strategy)
Knowledge of
customer
Yes Yes Yes Yes
Factors: Weather,
Competition, Risk,
Seasonality
Yes Yes Yes Yes
Budget
measurement
Yes Yes Yes No Ninemeier,
2001
(Menu-eng.)
Historical data Yes Yes Yes Yes
PEOPLE
Authority / commit Yes Yes Yes Yes
Meetings/
evaluation
Yes Yes Yes Yes
Yield –manag. Yes 2001 Yes Yes
Team-members Yes Yes Yes 1997
Skills Yes Yes Yes No

7. Management
Areas & Issues
Cross
1992 -
2009
Kimes1998-
2012 (18
art)
Thompson
2003-2013
(8 art)
Yeoman
&Watson
1999
Other Sources:
STRATEGY&TACTICS
Quality - (culinary
restaurants)
No No No No Gehrels, 2004; Surlemon
& Johnson, 2005;
Johnson et al, 2005
Gehrels & Dumont, 2012
Configuration -
restaurant
No 2004 2002, 2003a,
2003b, 2004
2007, 2008
No
Policies /
booking patterns
Yes 2008a, 2004c Yes Yes
Pricing 1992 Yes Yes Yes Shoemaker, 2003
Culture / trust Yes Yes Yes Yes
Options and
tactics
Yes 2004b,
2010a
Yes 1999 Quain et al, 1999; Muller,
1999; Parsa et al, 2005
Angelo et al, 2008
Social Media No Yes 2013 No
Implementation Yes 1999a, 2004a Yes Yes Van Poppel, 2005
Website/online
booking
No 2012 Yes No
Vision & ission 1997, 2009 1998, 1999b
2008b, 2010b
2010 No Lieberman, 2003
Customer Yes 2002, 2003
2007, 2009
Yes Yes Pine & Gilmore, 1999
Hwang & Yoon, 2009

9. Respondent position Characteristics for including in research
Restaurant owner-chairman
culinary assocation
Influential person within restaurant industry /
culinary restaurant owner for 37 years /
Owner / managing director at
consulting company
Knowledge financial & performance Dutch
hospitality industry / benchmark reports
Restaurant Manager-
Sommelier
Experienced in successful culinary restaurants-
coaches young talent for contests (service)
Restaurant owner / chef Famous Dutch chef -restaurant owner / published
book about all fifty-three European 3*** Michelin
restaurants
F&B Manager-raining Manager Experience in high quality hotels
Lecturer HM-Rev Man-Reserv
Man-FO Manager
Lecturing hospitality management & many years of
operational experience in revenue management.
GM / F&B Director-RM International experience in high level food &
beverage operations.
Owner online reservations
comp. – Culinary events org.
Online reservations market - restaurant table
configurations, customer perceptions/habits.
Restaurant Man. -Sommelier Experienced RM in successful culinary restaurants
Owner technology systems
company
Creator, developer of software solutions for hotel
and restaurants. International experience.
Lecturer HM – Author –
Consultant
Experienced in lecturing strategic and innovation
management. Extensive international network

10. Results and Conclusions
1. Culinary restaurants differ in certain aspects from other
restaurants.
2. Dutch culinary restaurants (DCR) do not consciously
practice revenue management + have no strategy for it.
3. If DCR could achieve 2-5 percent more revenue
associated with application of revenue management,
overall revenues could increase with € 8 million
annually almost all adding to the bottom-line.
4. Some RM tactics are applied unconsciously, specifically
those relating to customer relationship management.
5. Two key strategies for RM: demand-based pricing and
duration management are not applied in Dutch culinary
restaurants (it is feared that customers might possibly
shy away if they are applied).

11. Recommendations
• New and extended definition for
restaurant revenue management in
DCR.
• A conceptual framework for
restaurant revenue management
that visualizes the steps to be taken
by culinary restaurants to realize
the benefits of applying restaurant
revenue management.